Hicksville, N.Y.—Electronic Data Interchange (EDI), a system used for decades by large corporations as a means to conduct business with suppliers, is now available to individual floor covering retailers, contractors and distributors. Information technology (IT) departments from the industry’s largest manufactures have been working the past few years with flooring software providers, along with a select group of distributors, dealers and contractors to bring this technology, more commonly referred to as business-to-business (B2B), to the flooring industry. The result of this work to date is the foundation for what will be the way the industry conducts its business in terms of purchase orders, invoicing, shipping notices, acknowledgments, price catalogs and a host of other back office tasks that are essential to a business’ success. It will all be done via the Internet.

Eric Appleby, manager of IT strategic systems for Ohio Valley Flooring and marketing director for FlooringPlus, said, “Up to recently, EDI was out of reach for the smaller dealer. Now, it is available at an affordable level using the Internet and software which meets specific standards that address floor covering’s unique needs.” A Flooring B2B Standards Committee has been established by members of the entire supply chain and include most of the major manufacturers— Mohawk Industries, Shaw Industries, Armstrong World Industries, Beaulieu of America, Tarkett, etc.—buying groups such as StarNet and Abbey Carpet Co.; industry organizations, including the World Floor Covering Association ( WFCA) and the Carpet & Rug Institute (CRI), along with the majority of software developers with industry specific programs.

Appleby noted, “As a distributor, we were one of the early entrants in the B2B process. Right now, we can receive and transmit with a number of mills and dealers who have been involved. This will be a tremendous cost savings once it is fully on board.” Last year, at the annual StarNet member meeting, the first-ever live transaction took place during the general conference to demonstrate not only how far the process has come along, but how simple it is to use ( FCNews, May 26/June 2). StarNet has been one of the strongest advocators of this technology since the concept began at the turn of the millennium. Lori Dowling, CEO of the cooperative, said her contractor members “quickly realized the benefits of B2B, which is why we jumped on board. Not only to push the process but to make sure it is favorable to dealers and not just the mills and software developers.”

The reason members like B2B, she explained, is that it has an immediate positive impact on their bottom line. “It’s not going to result in the selling of more floor covering. Instead it will allow dealers to be more profitable by lowering their overall cost of doing business.” Pam Bowe of Bowe Co. and a consultant to StarNet, added, what B2B can do is reduce the amount of time retailers spend on tedious, but essential back office tasks, such as checking pricing, placing and checking up on orders, etc. In addition, money will be saved because B2B is much more accurate than the current method of handwritten forms, faxes and phone calls. And, one of the best benefits is that these tasks can be done at any time of the day since the computers never sleep. The demonstration at the Starnet meeting also proved of how much time and money can be saved. Aaron Pirner of CAP Carpet One estimates a dealer can immediately reduce his overhead from 1% to 5% depending on current size and how much of the store’s business is currently done via the computer.

“Not only does it reduce over-head, it allows you to get rid of those redundant, time consuming tasks by automating them which gives you more time to find other ways to improve your business’ profitability.” Members of the steering committee have noted the co-op’s role. “This whole process wouldn’t be moving as fast if not for StarNet,” said Dev O’Reilly, CEO of Roll-Master, one of the many software developers working to make its entire systems meet the standard protocol established by the committee. Jim Creamer of Potomac Flooring Covering and a StarNet member, said, what has really allowed B2B to become a reality in a matter of a few years is the fact “this task has brought together all levels of the industry, including competitors, and they are all working for one cause.” “This is one of the few things that is beneficial to everyone in the industry,” said Edgar Aya of Comp U Floor. “It’s expensive to process and produce the various forms and catalogs. B2B is a win-win for everyone; it will help to cut costs for all parties.”

In order to get the word out that B2B is moving ever closer to a reality and the more businesses who get involved the quicker it will happen, the Standards Committee has produced a number of documents, including a 30-page booklet setting forth criteria and procedures for certifying flooring suppliers and developers that they are B2B compliant.” All documents and work is posted on the Web site set up specifically for this project, www.flooringb2b standard.com. To ensure everyone in the industry understands what is going on, Bowe said the committee has taken all the technical jargon and put it in laymen’s terms. “For example, purchase order instead of number 12345.”

With that done, Creamer said the various software developers “are currently in the process of getting their systems certified so that a dealer can determine where each is at in terms of their claims.” Certification currently only applies to the five documents named above. “This is a huge process,” Apple-by explained, “and it will take some time to roll the entire thing out. Plus, each party can be at a different stage of development at any moment.” While the certification is voluntary, most expect every interested party will go through the process to ensure their products are noted as meeting industry standards. “It’s a matter of common sense,” Bowe said, “as they realize dealers, distributors, manufacturers and suppliers will only do business with those companies that comply with the standards.”

As more parties come on board, especially the buying groups, committee members expect the process to continue to move forward at a rapid pace. “At the last meeting we had,” Bowe said, “There were more people representing more groups than at any previous meeting. So, we’re on the radar screen and we expect more will be coming on board” “Already,” O’Reilly said, “we have had major competitors who have come together and agreed on a process. This has been a very collaborative effort by all parties and at all levels of the industry.” “The concept is still in its infancy,” Bowe concluded, “but we’re moving ahead quickly.” For more information, visit the B2B Web site.